SEPTEMBER 2018 FORAGE MARKET PRICE DISCOVERY - SASKATCHEWAN

Transcription

1 SEPTEMBER 2018 FORAGE MARKET PRICE DISCOVERY - SASKATCHEWAN 1

2 This document details the current market prices and general trends for forage products in Saskatchewan and nearby jurisdictions as at September 30, Information was obtained through a variety of methods including telephone interviews, personal interviews, electronic correspondence, social media communication as well as advertisements found on-line. The goal of this report is to provide an accurate assessment of forage prices across Saskatchewan at this current point in time. All data collected was as current and credible as possible, and each piece was carefully analyzed to determine its relevancy. The Saskatchewan Forage Council, including the author of this report, have made every effort to ensure the accuracy of the data reported, however it does not guarantee and accepts no legal liability arising from or connected to the accuracy, reliability or completeness of any material contained in this document. A sincere thank you goes out to all of the forage, dairy and beef producers, and those in the industry that were contacted to share their insight and current perspectives on this valuable industry. Thank you for taking time out of your busy schedules! 2

3 Table of Contents 1. Executive Summary Saskatchewan Forage Production Trends for Weeds, Field Pests and Disease Impacts in Saskatchewan Hay and Forage Freight Rates Current Saskatchewan Forage Prices by Crop and Sector - 14 a. Standing Hay - 19 b. Small Square Hay Bales - 20 c. Dairy Sector - 21 d. Organic Hay - 22 e. Silage Regional Forage Pricing Trends and Growing Conditions - 24 a. South Central/ South West Region - 24 b. South East Region - 25 c. East Central Region - 26 d. North East Region - 27 e. West Central/ Central Region - 28 f. North West /North Central Region Forage Price Trends in Neighbouring Jurisdictions Saskatchewan Pasture Rates References - 36 List of Tables Table 1. Estimated Provincial Hay Yields (in tons/acre) as at July 16, Table 2. Hay Transportation Costs in Saskatchewan as Reported by the Hour - 13 Table 3. Average 2018 Forage Prices in Saskatchewan - 16 Table 4. Average Forage Prices in Saskatchewan From Table Small Square Bale Asking Prices Across Saskatchewan - 20 Table Saskatchewan Forage Crop Prices by Region - 24 Table Forage Prices in Adjacent Provinces and States (reported in CDN$/tonne) - 32 List of Figures Figure 1. Long-term Saskatchewan average hay yields (in tons/acre) from , as reported annually in July - 6 Figure 2. Hay and Pasture Topsoil Moisture Conditions in April and September of Figure 3. North American Drought Conditions at May 31, 2018 and August 31, Figure 4. Seeded Acreage for Field Crops and Tame Hay in Saskatchewan, Figure 5. Level of Feedstocks on Farm, Surveyed August and September Figure 6. Average Fall Saskatchewan Forage Prices (in $/tonne) from

4 1. Executive Summary The September 2018 Saskatchewan Forage Market Price Discovery Report is a compilation of data and information collected from a diverse group of forage industry stakeholders in Saskatchewan as well as neighbouring provinces and states during August and September. This report presents a general overview of growing conditions for forage crops across Saskatchewan in 2018, as well as prices and market trends for different forage types as of this fall. Saskatchewan producers had prepared themselves for a drought and poor forage yields in 2018 after the surprise of depressed yields and drought in The long, cool spring was replaced by hot dry conditions nearly province wide. Pasture and hay land growth was slow and plants were stunted nearly everywhere. Precipitation was extremely spotty throughout the province during the growing season with some areas such as the far northern grainbelt producing average yields and others such as the west central region producing a fraction of normal. As of September 17, 2018, hay land and pasture topsoil moisture was rated as 31 per cent adequate, 38 per cent short and 31 per cent very short province wide. Rains during the last two weeks of September changed the soil moisture profile, but arrived too late to benefit forage plants in In 2018, hay production yields were once again below the long-term provincial average. Pockets of average yields were seen in the northern grainbelt. Producers have implemented management strategies such as baling intentional greenfeed, purchasing forages, feeding straw and grain, silaging, and culling herds harder than normal. At September 30th, prices were higher than the last two years, but still below the record high prices see in Alfalfa/grass hay is worth $138.80/tonne- slightly higher than $127.93/tonne in First and second cut alfalfa has a current value of $138.82/tonne and $183.72/tonne respectively, which falls within the price ranges seen in Grass hay has an average value of $126.63/tonne compared to $110.01/tonne in Greenfeed is currently calculated to have a weighted average of $137.01/tonne compared to its 2017 price of $120.37/tonne and the 2016 price of $94.60/tonne. Straw is valued at $55.63/tonne- the same as in During August and September, transactions were occurring quickly for fair priced forages. Transportation adds a significant cost to get forages to livestock. As rain and snow set in mid- September, the chance of additional salvage crops entering the market did increase. The majority of buyers and sellers continue to utilize electronic listings by means of initiating a non neighbour-toneighbour transaction. Alberta was hit with widespread drought and depressed forage yields in Alberta producers were not expecting poor yields and high forage prices province wide. Manitoba produced mixed yields in 2018 due to slow growth. Supply and demand in eastern Manitoba is not showing significant impact on Saskatchewan's forage prices. The drought Montana experienced in 2017 broke in Although the northern areas of North Dakota still suffered poorer forage yields, the rest of the state had above average forage production. Forage yields were adequate enough stateside in 2018 as to not put additional demand on Saskatchewan's forage supplies. 4

5 2. Saskatchewan Forage Production Trends for 2018 While 2017's forage production seemed to take forage users by surprise, 2018 was not a surprise for forage producers or users. In January, February, and March, users province wide were already running the worst-case-scenarios of what spring 2018 would bring and how they would buffer potentially low forage yields and high prices. Livestock producers feared for a prolonged spring feeding as there were generally little pasture reserves anywhere in the province from fall Forage producers feared there would be little spring moisture to get things growing. Both came true. There was 'zero' to 'an-uncomfortably-low' forage carry over left on farms. The Saskatchewan Ministry of Agriculture reported below average forage yields for hay in 2018 across the province as shown below in Table 1. Long-term average yields by crop are displayed in Figure saw the second lowest average forage production in eight years. In the low production years of 2015 and in 2017 late spring frost was a factor in depressed yields. Table 1. Estimated Provincial Hay Yields (in tons/acre) as at July 16 th, Provincial Forage Yields (tons/acre) Crop Dry Land Irrigated Land Alfalfa Brome/Alfalfa Other Tame Hay Wild Hay Greenfeed Data source: Saskatchewan Ministry of Agriculture 2018 Crop Reports Regionally, the hardest hit areas were the west central with yields of tons/acre and the south west with yields of 0.7 tons/acre. Early greenfeed reports indicated low yields (1.1 tons/acre) in the south west and moderate tons/acre yields in other regions. As the summer progressed, greenfeed yield estimates rose in the east by tons/acre as at August 9 th, Provincially, greenfeed yield estimates at July 16 th were 1.5 tons/acre and 1.6 tons/acre in mid August. The south east had notable greenfeed yields of 2.2 tons/acre, while elsewhere yields were at or below the longterm provincial average greenfeed yield. 5

6 Figure 1. Long-term Saskatchewan Average Hay Yields (in tons/acre) from , as Reported Annually in July. Average Saskatchewan Forage Yields (tons/acre) Long-term Average Dryland Forage Yields in Saskatchewan yr Average Crop (tons/acre) Alfalfa 1.38 Brome/Alfalfa 1.40 Other Tame Hay 1.21 Greenfeed 1.70 Alfalfa Brome/Alfalfa Other Tame Hay Greenfeed Data sources: Ministry of Agriculture Crop Report, 2018; Saskatchewan Forage Council 2017 Forage Market Price Survey. Of the past eight years, the three worst yielding years are contained within the last four is a mirror image of 2017's production- but for different reasons. Acres seeded to greenfeed rose significantly in The greenfeed production estimates of 1.6 tons/acre at August 9th (Ministry of Agriculture, 2018), were very close to the provincial long term average of 1.7 tons/acre. The majority of forage producers were happy with greenfeed yields and felt they were average. Producers not implementing weed control, those seeding late or using old seed, and those not using fertilizer had reduced production. In addition to utilizing annuals as greenfeed, there has been a widespread movement of cow/calf operators utilizing cut silage 'again'. Silage's popularity with Saskatchewan cow/calf producers peaked in the 1970's and 80's. Interest in silage bales is also strong, especially in the north east. Silage use and production is an interesting trend that the Ministry of Agriculture may find value in tracking. It begs the question, will cut silage be the next 'thing' like bale grazing was when hay was considered inexpensive? Forages harvested in 2018 are of reasonable quality. The majority of forage listings indicate no rain during haying. The extremely dry conditions have lowered feed quality in a number of regions. Producers are being advised to feed test perennial forages. Additionally, some higher nitrate levels in greenfeed are being seen due to drought stress in nearly every region of Saskatchewan. Forage Specialists are advising on feed testing and balancing rations when using greenfeed. The Ministry of Agriculture reported that as at July 17, 2018, approximately 47% of the hay crop was baled or silaged with an additional 22% ready for baling. In 2017, baling was slightly ahead with 59% complete and 20% in the swath. Indications are that second cuts were either non-existent or extremely poor in all areas except where there was a pocket of localized high precipitation or under irrigation. 6

7 Production trend influences- weather related Winter weather is one of many factors influencing forage production trends. Winter 2017/18 was considered cold and long. There was significant bedding/straw use. Regions had prolonged snow cover or were just too cold and dry once the snow melted for a normal pasture turnout. Livestock producers feared late spring feeding as there were little pasture reserves anywhere in the province (generally) from fall They feared there would be little spring moisture to get things growing. Both came true. Many cattle were drylot fed until June. There was 'an-uncomfortably-low' to 'zero' forage carry over left on farms. As was previously seen in 2017, low carryover is likely contributing to the forage demand being seen in fall 2018 in a two-fold way: Producers who usually have carryover and may sell excess forages (increasing market supply) do not have forages to sell; and producers who count on some carryover to get them through the year do not have carryover (increasing market demand) and are entering the market as buyers. Soil moisture conditions on hay and pasture lands at the start of May were adequate to slightly below adequate across the province, with the exception of the south central and east central areas that were short (Figure 2). Saskatchewan hay land and pasture topsoil moisture was rated as two per cent surplus, 55 per cent adequate, 31 per cent short, and 12 per cent very short as of May 7st, As of September 17, 2018, hay land and pasture topsoil moisture was rated as 31 per cent adequate, 38 per cent short and 31 per cent very short (Figure 2). Areas experiencing moisture shortages are widespread and have had an impact on forage prices and demand. Figure 2. Hay and Pasture Topsoil Moisture Conditions in April and September of Data source: Saskatchewan Ministry of Agriculture, May 7, 2018 and September 17,

8 Overnight temperatures remained low during the first week of May, delaying alfalfa growth. In the following weeks, as moisture continued to be limited, the daytime temperature began to skyrocket and it became very windy provincially. Daytime temperatures hit degrees Celsius for over two weeks when there was limited precipitation. Perennial forages became stressed with high heat, high winds and low moisture. Provincially, the conditions were not conducive to bulk matter (stem and leaf) production at a critical time in May. From May 22 nd to June 4 th rain was received in many area in the north west, north east, and south east. Perennial plants in these regions were still at a growth stage where they were able to utilize moisture for bulk matter production. Perennial forage production in these regions was average to slightly below average on newer stands or those with fertility management. Yields were reduced in older fields, on poorer soils and in areas without fertility management. In the south west, south central, west central, and many east central areas precipitation did not arrive, or arrived too late for the stage of growth perennial plants were in. Bulk matter was not produced. Many stressed alfalfa and grass plants were flowering by mid-june and haying had begun by June 18 th in some areas of the south west. This is approximately one week earlier than usual. Figure 3. North American Drought Conditions at May 31, 2018 and August 31, Data source: National Drought Mitigation Center May 31, 2018 and August 31,

9 Across North America, drought prevailed mainly in Canada and touches of the northern states in a belt from the Pacific Coast to the shores of Lake Superior. Drought Conditions are shown in Figure 3. Relief from drought was seen across many parts of Montana and North Dakota. Forage yields were sufficient in these states. Drought persists along the Pacific coast and down through Idaho, Colorado, Utah, Nevada, and New Mexico. Forage is moving to these states from northern states. In areas of Saskatchewan where drought prevails, the top concern of producers interviewed is ensuring they have enough high quality forage for calving and post-calving. Although greenfeed yields were sufficient, and a supply is available, perennial forages are being sought. The secondary concern is sourcing the alternative feeds needed to top up on-farm supplies. Provincially, pasture conditions and the ability for vigorous spring perennial forage growth are also a general concern, but less so than in the fall of Production trend influences - non-weather related The crop harvest in Saskatchewan was slightly early to normal leading up to September 15 th. The south west was 82% complete while the north west was only 16% complete (Crop Report, 2018). Widespread precipitation through to the end of September hauled all harvest activities. It is yet to be seen how much unharvestable crop will enter into the forage market. In 2016 there was a last ditch effort to salvage crops this way. At the time of this report, sales of greenfeed had dropped off approximately $30/ton since the September precipitation began. Areas where crops were too poor to combine were either already turned into greenfeed or were combined. Unlike in previous years where these baled crops mainly stayed on-farm for personal use, there was movement to this practice by grain farmers in the south and west as word of $200/ton forages began circulating. One noticeable trend in 2018 is the offering of straw for sale in straight crop producing areas. The media attention on "the feed shortage" has prompted many extra offerings at a higher than average price. Decent silage yields and more silage acres will also be filling in gaps for many forage users. Pasture growth and regrowth has varied significantly across the province. Where moisture was timely, regrowth was fair. Low forage production continues to result in high pressures on pastures, low carry over, and cattle numbers in excess of carrying capacity which exacerbates the situation. Producers have indicated they will graze as late as possible this fall, including on hay land. Lack of water continues to be an issue province wide as sloughs and dugouts are dry or at extremely low levels. Over utilization of pastures combined with a cool spring could result in a delayed spring grazing season once again. Fertility continues to be highly managed in the grain industry but not widely practiced in the forage industry. Producers in the eastern regions who utilized forage fertility programs indicate their yields were 15-40% better than on fields without fertility programs. There continues to be a strong case for 9

10 forage fertility management but mindsets must change first. Awareness of a forage stand s fertility needs is being actively discussed and promoted by Forage Specialists across the province. Compounding on weather factors, we may be seeing a production capability factor beginning to show up in forage stands. Through GreenCover, Ag Policy Framework, and Growing Forward 1 there were many acres of cropland converted to forages. The programs' cost share funding encouraged perennial seeding on nearly any class of land (GreenCover was an exception). As a result of the past seeding programs, we could be seeing that: 1) Forage stands on higher assessed land (with a higher production potential) are being returned to annual crop production once again. Marginal land with less soil production potential is staying in forages. 2)Forage stands previously seeded are getting old. The start of APF was 15 years ago and GF1 was 10 years ago. Production could be decreasing due to stand age combined with a grass increase/alfalfa die out (straight alfalfa use was restricted in these programs). 3) Fertility management on forage stands is not a common practice. Nutrients are a limiting factors for production as a stand ages. 4) New forage stands are most often being seeded on "marginal land" today (Forage Specialists personal comm.). Unfortunately, marginal land's ability to hold moisture and meet production goals is limited. Expectations for production should be realistic. For the first time in a number of years, Canada s cattle herd decreased in size by 0.8% to 12.4 million head in July (Statistics Canada, ). Largest declines were seen in breeding cows and heifers. In fall 2017, producer interviews indicated an inclination to sell all heifer calves in the fall calf run to offset their 2017/18 feed shortage on-farm. Nationally, beef heifers retained was down 2.6% to 669,900 compared to July Nationally, the number of beef cows decreased 1.2% to 3.7 million head. The provincial cattle herd numbers showed a greater decrease than the national average (1.15% decrease). Saskatchewan's herd decreased from million head to 2.60 million head at July 1 st, 2018 (*note: the new form Statistics Canada numbers were used in this calculation). *Note: Statistics Canada altered the way of tabulating the cattle herd size in July 2017, thus previous year estimates were revised with the new methodology and were made available in January 2018 for usage. For example: The 2017 provincial estimate was million head previously but has been revised to be million head with the new methadology.* The number of farms reporting cattle inventories has dropped once again in this year by 1.8%. Since 2016, a 3.5% decrease overall in farms reporting cattle has been seen. In 2016 and 2017, because the herd size was growing, it could be assumed there were more livestock are on fewer operations resulting in more animals to feed on one single operation (on-farm forage shortages were larger quantities per operation). With increased cattle slaughter numbers nationally, a decrease in the cattle herd, and a decrease in farms reporting cattle, it can most likely be assumed dispersal cattle were not just absorbed into other herds without high cull rates from the purchaser. Producers interviewed indicate they will continue to cull herds hard and retain less or no heifers/backgrounders to address feed shortfalls. Cattle feeders indicated that they will continue with the 2017 trend of relying more on silage and alternatives. 10

11 In 2018, Statistics Canada revised the historic Seeded Acreage for Field Crops and Tame Hay. The review and revisions have significantly altered a number of yearly tame hay acre estimates. When the 2011 tame hay acreage is compared to the 2017 tame hay acreage, approximately 820,000 acres of tame hay has been lost over seven years in Saskatchewan. This is a significant difference compared to the previously reported 160,000 acre loss pre-stats Canada revisions tame hay acreage sits at 3,840,000 acres (Statistics Canada, ). Acres seeded to field crops have steadily increased. Annual cropped acres hit a plateau in 2016 when fields were wet, but once again there has been a small increase. Summerfallow acres continued to decline but at a slower rate than 5 years ago. When analyzing the data, it appears about half of the lost tame hay acres have been put back into field crop production, while the other half have been converted to non-hay uses such as pasture. Currently, the estimated seeded tame hay acreage for 2018 is 2.4 million acres. Although this is an estimate, it should be noted that this is 37% less tame hay acres than If this estimate holds, this will have a significant impact to forage supply and demand in Saskatchewan- likely this estimate will not hold as it does not capture all relevant data to the end of December, 2018 as of yet. Figure 4. Seeded Acreage for Field Crops and Tame Hay in Saskatchewan are Displayed for ,000 30,000 20,000 10,000 0 Saskatchewan Seeded Acres ('000 acres) field crops* Summerfallow Tame hay SK Tame Hay Seeded Acreage ('000 Acres) AVG 4274 *Field crops include barley, canary seed, canola, chickpeas, flaxseed, lentils, mustard, oats, peas, rye, soybeans, durum, spring wheat and winter wheat. Data source: Statistics Canada, Manitoba seeded tame hay acres have remained relatively stable (according to revised Stats Canada data) over the past 8 years. In 2016, acreage was estimated to be 1.6 million acres and 2017 to be 1.62 million acres. Alberta, like Saskatchewan, has experienced a continued reduction in the reported seeded acres of tame hay to 4.38 million acres in 2016, although a small increase was seen in 2017 to 4.46 million acres. Nationally, tame hay acres have been slowly decreasing since However, national tame hay acres maintained a level of 14.5 million acres in 2016 and

12 3. Weeds, Field Pests and Disease Impacts in 2018 There were no major provincial outbreaks of forage pests this past season. Although there was not a widespread late spring frost, there was a cool start to spring which may have helped limit insect infestations. Insect infestations may become an issue in 2019 if the hot/dry cycle continues. Many producers and professionals noted they are concerned for potential outbreaks. Although there may have been localized severe alfalfa weevil infestations, the alfalfa weevil was not seen as a wide spread concern across regions in Alfalfa weevil will continue to be a pest of economic concern into the future now that it has established in Saskatchewan. The dairy industry noted considerable alfalfa winterkill on high production fields through central Saskatchewan. The grasshopper forecast for 2018 was 0-2/ m 2 across the province with extremely small pockets of very light (2-4/m 2 ) infestations in the Meadow Lake area based on fall 2017 counts (SCIC Provincial Grasshopper Map, 2018). No significant infestations were noted in forages in 2018 by Provincial Specialists. The hot dry conditions, which are conducive to grasshopper proliferation, were prevalent across the province for the summer. However, the cool and damp September weather will have a reducing impact on 2019 populations. There were relatively few reports of diseases affecting forage crops at the Ministry of Agriculture Crop Protection Laboratory once again in In general, many non-forage crops that were submitted to the lab were suffering from heat stress and lack of moisture. Richardson ground squirrel infestations have not been a major issue in recent years. Yet, there are pockets of infestations emerging various locations across Saskatchewan. These appear to be very localized but as seen in the past, under warm and dry conditions, colonies can become a nuisance to forages in a short amount of time. Producers in areas of infestations have noted they are using shooting, burrow collapse and poisoning to control colonies. There continues to be few systemic weed problems reported in forages. Strong healthy perennial plants often have the ability to buffer any annual weed infestations. Provincially, the health of forage stands decreases from north to south at present and from east to west. Growing season conditions have been hard on forage plants. Localized infestations of weeds such as Canada thistle, narrow-leafed hawks beard, absinthe, kochia, foxtail barley, leafy spurge, downy brome, scentless chamomile, and toadflax may occur. As forages were purchased and transported from afar by producers in 2017, and now again in 2018, an increased level of invasive species may be spread in purchased forages. The awareness piece surrounding weeds in hay has increased by the Ministry of Agriculture. In Saskatchewan, there are currently 14 reported herbicide resistances within weeds: cleavers, kochiax2, wild oats, chickweed, shepherd s purse, wild and ball mustard, redroot pigweed, Russian thistle, stinkweed, hemp nettle, Persian darnel, and green foxtail (Crop Production News, 2017). Healthy perennial forages can generally outcompete these species. 12

13 4. Saskatchewan Hay and Forage Freight Rates Hay transporters are once again in demand in Transporters reported the jobs they have lined up are larger jobs, booked for greater distances. Many jobs are hauling bale allotments 100 km or more, and they report hauling a considerable amount of straw from a considerable distance. Many transporters indicated they have bales booked to haul ahead of them. Compounding the demand is 1) wet fall conditions which can make for difficult hauling and, 2) the continued climb in diesel prices. Fuel surcharges (10%) or mobilizations rate to cover fuel are once again common as clear diesel sat at to cents /L in Saskatchewan during September ( At the same time last year clear diesel was 95.7 to 99.7 cents/ L. Hay transporters continue to further standardize how they provide rates to potential clients ($/loaded mile or a flat hourly rate). In Saskatchewan, based on interviews, forage freight rates vary from a low of $4.00/loaded mile to a high of $11/loaded mile. In 2018, the average long haul hay transportation rate for Saskatchewan, was between $6.47-$6.51/loaded mile.. However, one new cost that is emerging on top of this rate is an hourly cost to mobilize trucks for long hauls. Those implementing these rates indicated that when they have to drive two hours to just get to the location of the forage they cannot do this for free. Mobilization rates vary from $120/hour-$185/hour. Table 2 explains other freight rate metrics as reported (with an additional eight reported rates). These numbers represent real transactions in 2018 as hay is steadily moving. There were no rates reported for US hauls in 2018 as stateside trade has fallen off in In years of low production/high demand like 2017 and 2018, self-loading units do not accurately depict what it costs to transport hay to livestock on a provincial scale. It can however, indicate what levels of transport producers themselves cover for moving their forages from a local field to their individual feedyard. In years of high production/low demand, self picking units may provide insight into neighbour to neighbour transport costs as producers generally do not need to search outside of their neighbourhood for forages. According to the Government of Saskatchewan s Farm Machinery Custom and Rental Rate Guide for self-unloading PT bale movers (best suited for short hauls), an approximate hourly custom rate is $187.77/hr. Self-picking costs vary from $1.50/bale/mile to 3.29/bale/mile for an average of $2.40/bale/mile. A mobilization fee may be charged on top of this rate. Table 2. Hay Transportation Costs in Saskatchewan as Reported by the Hour Condition of Measurement Rate Self loading/unloading units $2.40/bale/loaded mile* Super-B (44-48 bales) $6.75-$8.00/loaded mile* <96 km (60 miles) distance, 34 bales/load $159/hour >96km (i.e. 60 mile) distance, 34 bales/load $6.51/ loaded mile* * a mobilization fee or empty travel fee may be on top of this rate. 13

14 5. Current Saskatchewan Forage Prices by Crop and Sector Saskatchewan producers who are buying and selling forage, conduct the majority of their transactions between neighbours or through acquaintances instead of listing publicly. The electronic listing service Kijiji has become by far the most popular means of buying and selling on farms across Saskatchewan over the past 4 years; the number of hits on a hay advertisement can reach over 100 in a day. Through September, the majority of listings of average priced forages sold in under three days on Kijiji. Social media, print advertising and radio 'trading posts' are also used but far less than the other two means. In 2018, perennial forage crop yields were below normal in most areas, closely resembling yields experienced in 2017 and Some areas of average perennial forage yields were seen. Greenfeed yields were close to average or above average in most areas. There are very few listings of forages baled in previous years. Indications are that there is no supply of old forage still on hand; it was either sold in 2017, or has been kept for personal use. Due to the hot and dry spring, hay quality is lower than expected overall. Nitrates are a concern in greenfeed due to heat and moisture stress. Some localized rain delays were seen province wide during haying. However, quality in general was not impacted. Forages listed as 'rain on while in swath' still sold promptly through early September. Demand for forages this season is high. Livestock producers were surveyed via twitter and personal communications mid August through mid September as to their level of feedstocks before they started sourcing feed^. The majority of producers (55%) were short of forages. This is a broad picture, and by no means an official survey without error. Many producers surveyed who are 'just right' have stated they are culling cows harder, not retaining calves, and/or were always planning on baling straw, and had planned greenfeed to ensure adequate feed supplies. ^ Responses were not grouped or tracked based on region and regions were not necessarily proportionally represented in survey results. 14

15 Figure 5. Level of Feedstocks on Farm^, Surveyed August and September % SHORT 26 % 10-20% SHORT 29 % JUST RIGHT 33 % SURPLUS 12 % Percentage of Producers (%) The majority of electronic listings move offline within a short number of days. Sellers in northern, eastern and the far southeastern regions have been slower to move forages in 2018 as local demand has been for reasonably priced forages only. Unlike in 2017, when forage yields were low and forage users were surprised, many forage users went into fall 2017 already planning for a drought in There is the sense that planned greenfeed^^, baled straw, and grain or pellet supplements will 'get us through'. Cattle producers are prepared to feed anything from canola to kochia to keep costs in check. It has become evident there is a ceiling value for the end forage user (beef cattle). Provincially, the potential in the drought stricken areas (see Figure 2) for poor spring growth on pastures continues to be real as pastures generally have little carryover and plants are hurting after two years of spring/summer drought. Price information was collected through phone and surveys of livestock producers, hay producers, hay brokers, truckers, dairy farmers, and feedlots. Data was also collected from electronic scans of online classified ads (i.e. kijiji.ca, hayexchange.com) and provincial and state government forage listing services. Simple and weighted averages are provided in Table 3. In 2018 (like was seen in 2017), the August and September prices had an overall sense of firmness to them. ^^ Planned greenfeed is considered a annual crop that was seeded specifically to be turned into forage and not harvested as grain. Unplanned greenfeed is a crop seeded with the intent of grain harvest but turned into forage due to hail, drought, wildlife damage or high demand by oneself/to sell. 15

16 Table 3. Average 2018 Forage Prices in Saskatchewan Forage Type Weighted Average Price ($/tonne) High ($/tonne) Low ($/tonne) Grass Hay $ $ $79.36 First Cut Alfalfa $ $ $88.18 Second Cut $ $ $ Alfalfa Alfalfa/Grass $ $ $80.83 mix Greenfeed $ $ $89.56 Clover na na na Cereal Straw $55.63 $ $33.07 Pulse Straw $87.05 $ $66.14 First and second cut alfalfa has a current weighted average of $138.82/tonne and $183.72/tonne respectively, compared with $153.89/tonne and $141.92/tonne the same time last year. Although the price averages are seeing some differences between listings, there was not enough of this class of forage produced this year to notice a year-over-year trend. Supply is tight. Buyers are actively seeking this class of forage with only a relatively small quantity hitting the market. The ability to take a second cut was very localized this year and was dependant on timely rains or the availability of irrigation. Please refer to the dairy market section 5(a) for additional insight on dairy quality alfalfa not included in this section of the price analysis. Alfalfa/grass hay has a current weighted average of $138.80/tonne, which is higher than 2017 at $127.93/tonne. In the south west, south central, west/west central transactions occurred very quickly on listed alfalfa/grass forages as southern buyers try to minimize trucking costs. The highest listed price (of $228.06/tonne) was settled in the west central region. Likely the price of alfalfa/grass has settled where it will or close to it. $10/tonne on either side of $140/tonne ($0.063/lbs) is foreseeable for first cut alfalfa/grass. Those needing this quality of feed for a specific purpose (horses, calving, lambing) will still need to acquire a set amount of this forage and only a relatively small quantity of forages hitting the market are of this quality. Prices could soften some in areas such as the far reaches of the south east, north east, and north west where trucking is less affordable because of the distance to the areas with heavy demand. Grass hay has a current weighted average value of $126.63/ tonne which has been a steady year over year increase since Asking price may be influenced by the class of grass hay (slough, ditch, seeded), but demand is steady. There is a noted demand for this class of forage by horse owners who may have usually picked up grass hay from a neighbouring beef producer but do not have that supplyin2018. Supply is tight (very few listings) and prices are anticipated to hold steady through the fall. 16

17 Greenfeed is currently calculated to have a weighted average of $137.01/tonne. The mid-september price was significantly higher than 2017 at $120.37/tonne (13.8% higher) and 2016 price of $94.60/tonne (44.8% higher). Producers indicated they seeded a large quantity of planned greenfeed^^ in preparation for poor perennial forage yields. A number of hailed crops entered the market as neighbour to neighbour sales, and on listing services. Movement was steady. In 2016, the quantity of unharvested crops taken as greenfeed 'saved the day' by ensuring producers had enough feed. In 2017, no additional unplanned greenfeed^^ entered the market. If this report had been authored before mid September, the discussion about greenfeed prices and predictions would be considerably different. With 38% of the crop still to harvest provincially (only about 1/2 the cereals done), there are crops that will only be able to be salvaged by turning into unplanned greenfeed due to the precipitation and poor conditions that persisted at September 30 th. Locations where the 'preprecipitation' prices were averaging $130/tonne, a drastic drop is anticipated. Likely 2018 prices will mirror 2016 prices when the same type of devastating moisture event happened in October. A greenfeed value of $90-100/tonne would not be surprising moving forward. Cereal straw is being incorporated as a alternative feedstuff province wide through the upcoming winter. South of Highway 16 straw will be fed more-so than north. In response to this, non-livestock producers have begun baling straw. Producers interviewed noted their straw purchases for feed were done neighbour to neighbour where possible. Feedlots indicated straw was being brought in from much farther away than in previous years. Straw to mid-september was baled dry and is valued at $55.63/tonne (weighted), which is very similar to The cost of trucking 1000 lbs straw bales limits the trucking distance and settled price. Pulse straw saw an average of $87.48/tonne. The superior price over cereal straw reflects the additional feed value of this straw. The 2018 asking price low of $66.14/tonne was about $10/tonne higher than 2017 s low. Neighbour to neighbour sales are likely similar to the listed averages seen. It is noticeable in the eastern regions that there is a larger quantities of pea straw being baled for personal use or neighbour to neighbour sales. Yellow sweet clover hay is no longer commonly found across the province. Previously, some organic plow down sweet clover crops may have found their way into the forage market- today many of these crops are being replaced with mixed cover crops on organic operations. In decades past yellow sweet clover may have been used as a short term (2 year) answer for feed needs. Today, annual cereal crops are turned to as the preferred solution for feed needs. A comparison of forage prices from can be viewed below in Table 4 with a graphical analysis in Figure 5 found following the table. 17

18 Table 4. Average Fall Forage Prices in Saskatchewan from Forage Type Average Price ($/Tonne) Average Price ($/Tonne) Average Price ($/Tonne) Average Price ($/Tonne) Average Price ($/Tonne) Average Price ($/Tonne) Grass Hay $ $ $ $ $94 $82 First Cut Alfalfa $ $ $97.78 $ $98 $98 Second Cut Alfalfa $183.72* $ $ $ $118 $111 Alfalfa/Grass Mix $ $ $97.98 $ $86 $81 Greenfeed $ $ $94.60 $ $83 $79 Straw $55.63 $54.80 $63.11 $47.99 $44 $46 Yellow Sweet Clover - $ Data Sources: Saskatchewan Forage Council, 2013, 2014, 2015, 2016, 2017 & Figure 6. Average Fall Saskatchewan Forage Prices (in $/tonne) from Straw Greenfeed $46 $44 $48 $63 $55 $56 $79 $83 $95 $120 $141 $137 Alfalfa/Grass Mix $81 $86 $98 $128 $139 $177 Second Cut Alfalfa First Cut Alfalfa $98 $98 $98 $111 $118 $127 $142 $154 $139 $184 $197 $232 Grass Hay $82 $94 $101 $110 $127 $163 $0 $50 $100 $150 $200 $

19 A) Standing Hay There was very little private standing hay reported in 2018 during August and September. Standing hay rates were actively sought from producers across Saskatchewan known to purchase standing hay. Standing hay agreements are often on a mutual, long-term basis, between neighbours. Organizations with a habitat conservation focus such as Environment Canada, Ducks Unlimited Canada, Saskatchewan Wildlife Federation, and Nature Conservancy of Canada often control large tracks of land that are tendered for hay yearly, bi-yearly or on an as-needed basis. Many producers indicated in 2018 that production from rented standing hay crops is declining and poor. Declines were attributed to poor fertility, alfalfa die out, and stand age coupled with drought. There are three common agreements for standing hay: 1) the buyer takes responsibility for cutting, baling and hauling the forage and then takes a previously agreed upon share of the hay. One listing was found indicating a 1/3 share and a second indicated a 50/50 share was desired by the landowner. 2) a price per acre. The buyer is responsible to match their per acre offer in accordance to what they gauge production will be. This is more common with habitat conservation organizations or government. The 2018 lease rate (crown) for hayland was $17.94/acre. It is estimated habitat conservation organizations offer a minimum of 12,000 acres of standing hay yearly price per acre varied greatly from $10.00-$85.00/acre across the province. There is no trend regionally. 3) sold on a per weight basis (i.e. 15% dry matter) after the hay was cut, baled, and weighed by the purchaser. In previous years, long-term agreements stood, and price remained constant. There are numerous agreements that had been constant, but have crept up in Many purchasers indicated they paid more so that they were not pushed out of the market, and so that the land was not turned back to annual crop production. There were no defined regional rate trends in Rates from across the province averaged $0.033/lbs with the range from $0.005-$0.068/lbs. The mean price was $0.0288/lbs. One certified organic standing price (excluded from the provincial average) was reported at $0.05/lbs. Assuming these stands yielded the 2018 provincial average of 1.0 tons/acre (equivalent to 0.91 tonnes/acre), this would result in a per acre price ranging from $10.00-$136.00/acre. The cost of cutting and baling hay should be factored in when evaluating standing forage compared to baled forage. The approximate cost of cutting* is $14.46/acre and the cost of baling* is $14.82/1800lbs bale (Saskatchewan s Farm Machinery Custom Rate and Rental Guide). For a crop that yields the provincial 2018 average of 1.0 tons/acre, the cost of cutting ($14.46/acre) and baling ($16.47/acre) would be is approximately $30.93/acre in addition to the cost of the standing forage. Cutting and baling forages is costly, mainly due to the high cost of equipment. * The cost of cutting is the average of 14' disc & 14' sickle conditioner custom rate. Bale is 5'x6' and includes $1.25/bale netwrap. 19

20 B) Small Square Bales Small square bales are most often sold on a per bale basis. Small square hay bales typically weigh lbs and straw bales weigh approximately 40 lbs. The bales may be purchased by small-scale farmers, or recreational or acreage owners feed small numbers of livestock. In 2018 trends were very similar to 2017; there were a high volume of electronic listings seeking to buy small square hay bales, mainly for horses. The reason for seeking forages was often listed, as the normal supply was not an adequate quantity. Interestingly, there were also numerous listings in August and September of horses for sale because feed was too expensive to afford. Electronic listings of small square bales for sale were plentiful in August and September leading up to authoring this report. Turnover of listings was slower than in One potential reason is purchasers sourced them early before haying season which put less of a demand on the open market. Due to their smaller size and higher labour input for stacking and hauling, small squares are typically more expensive on a $/tonne basis than large round or large square bales. Sellers also capitalize on buyers needing small quantities and not work costs back to dollars/tonne. Table 5 demonstrates the average prices for small square hay and straw bales on a per bale basis. Table Small Square Bale Asking Prices Across Saskatchewan Forage Type 2016 Average Price ($/bale) 2017 Average Price ($/bale) 2018 Average Price ($/bale) Alfalfa $6.50 $6.25 $6.62 Alfalfa/Grass $4.89 $6.20 $5.70 Grass $5.50 $5.30 $5.19 Unspecified Hay $5.00 $5.00 NA Straw $2.13 $2.94 $3.12 Organic Hay NA $5.92 * straw $2.50 Greenfeed NA $6.50 $

21 C) Dairy Sector Producers continue to make very strong indications the use of forage within the dairy industry is changing. The strong shift to silage use where possible continues. Multiple dairy nutritionalists indicated more silage acres were harvested on each one of the operations they work with in Cereals continue to be the go-to in silage crops, with corn usage leveling out. The addition of non-traditional byproducts (beet pulp, soy by-products) is also occurring. Cows have a roughage/forage requirement and not a hay requirement- and the fluctuating cost of alfalfa due to weather patterns can be mitigated by utilizing other feedstuffs. See Section 5(e) regarding silage yields and pricing. Silage pricing ($/mt) is consistent across all end-user industries. The price of dairy quality forage has been strong thus far in According to producers, dairy hay (fine alfalfa) was reportedly worth as low as $165.34/tonne up to $280.00/tonne. An average of $220- $230/tonne can be expected as many producers move to alternatives at that price point and trucking can become cost prohibitive. In some situations, irrigated dairy alfalfa continues to be imported from Alberta at a premium- $253/tonne picked up and up to $320/tonne delivered are just two examples. Few dairy quality forages are offered for sale, indicating long-term purchasing relationships dominate the industry. Dairy forage is often sold based on the Relative Feed Value (RFV) as reported in the nutritional analysis. Minimum RFV for dairy use is 140 (or greater). The $/RFV of alfalfa has been climbing steadily over the past number of years from $0.80/RFV pre 2015, to $ /RFV in In 2018, industry contacts indicated that dairy quality hay is worth approximately $1.50/RFV but upwards of $2.00/RFV unit delivered has been seen. Converting that to $/tonne is demonstrated in the following calculation: 140 RFV x $1.50/RFV unit = $210/ton or $231.00/tonne It should be noted that silage values cannot be converted to a RFV as RFV is based on ADF and NDF, and is not able to take into consideration the additional starch that a silage provides. It is therefore only a useful number to compare different alfalfa products when paying for quality. The 2018 average discovered asking prices for dairy quality hay in Alberta and Manitoba are $252.79/tonne and $216.79/tonne respectively. It should be noted that very few dairy quality forages are publically offered for sale. Forage production was less than average in both provinces this year. Sellers and buyers continue to have long standing relationships. 21

22 D) Organic Hay Pricing of organic hay must consider factors which can lead to difficulty in discovering true price. Many producers who are certified organic in grain production do not raise their livestock as certified organic, hence a lower demand for certified organic forages. Most producers of organic livestock grow their own forages and retain surplus for future years. Lastly, the organic industry is a very tight-knit, organized group- thus most needed forages trade hands by word of mouth and personal connections instead of listing services. One Saskatchewan producer reported selling standing organic hay for $0.05/lbs in 2018, but sold the same crop standing for $0.046/lbs in 2017 and $0.025/lbs in The producer equates the higher price to the overall demand for hay, not because of organic status. Organic hay on offer averaged $183.72/tonne in central Saskatchewan. In 2016 it was estimated that an organic forage would command a 25% premium over a conventional forage. If applied to 2018 conventionally produced grass/alfalfa forage ($138.80/tonne) the organic product would be priced at $173.50/tonne. This falls below the organic price average, but still within the price range of conventionally grown forages surveyed. One emerging trend within the organic sector that may impact forage pricing and availability is cocktail cover crops. These cover crops are multi-species mixes of various annual or biennial plants. Many of the plant species involved are not traditionally found in Saskatchewan, but have a significant forage value. Producers with cover crops are 1) only plowing in cover crops, 2) having the crop custom mob-grazed, or 3) taking on livestock for grazing themselves. Industry representatives indicate cover crop grazing rates are settling in the $1.00/day/pair range with many different arrangements for fence, water and animal management occurring. E) Silage The satisfaction with the 2018 silage crop was once again mixed. Where producers received timely rains yields were decent ( tonne/acre). In the south west and west central areas, many yields were poor when moisture did not arrive in time ( tonne/acre). In many of these locations it is the second year in a row of poorer silage yields. Cereal silage yields are overall reflective of what early seeded greenfeed yields are in an area. The use of corn silage continues to grow in many locations across Saskatchewan (north), but normalize elsewhere (south west and west central). Corn silaging was still underway in many locations at the time of this report. Early yield data from the south west indicates 6 tonne/acre and an estimate of 12 tonne/acre dryland elsewhere. The trend of cow/calf operations including silage as a primary forage source has continued. Those in the industry note producers with large cow herds (250+), or mixed operations (own large equipment already), or those in areas where land prices are high are turning to silage as an option. A significant amount of silage is being seen in the south east. As this trend continues, determining how to set a trading value on the commodity when it is not easily transported/sold will continue to be a challenge. Silage values are reported as being priced in the pit, on a wet metric tonne basis (60-65% moisture). The cost of growing a crop for silage, including inputs such as seed, fertilizer, and crop protection products, as well as the cost to harvest, haul, pack and cover silage, all need to be factored in when developing a 22

23 current valuation of silage in the pit or pile. Values provided below were used by producers to calculate costs of rations or net worth or, in some cases, to work back payment to growers for standing silage. As such, it can be assumed that the following figures are an accurate depiction on 2018 cost of silage. In 2018, feedlots, private producers, and nutritionists reported the 2018 cereal silage (i.e. barley, or mixed grains) to have an average value of $56.25/tonne at the pit. Dairy nutritionists indicate an alfalfa silage value of $50-65/tonne. Producers valued their corn silage to be worth an average of $63.30/tonne at the pit. Canfax (Canadian Cattlemen's, 2018) reported Alberta barley silage at $67.00/ton ($73.85/tonne) in August and $70.50/ton ($77.21/tonne) in September. Two other methods of silage valuation are used by producers. In previous years, some producers gauged cereal silage values off feed barley prices by multiplying bushel price by 12. The Lethbridge feed barley price average for the week ending September 28 th was $244.50/tonne or 5.32/bushel* (Alberta Agriculture, 2018). Using the rule of thumb to estimate, barley silage would be valued at $63.84/tonne. Both this year and in 2017 using this factor produced a figure above the average price reported but falls in the range of values reported by producers. Others suggest that working a silage value back from the greenfeed going price may produce a more realistic value. Hay to silage conversion= (100-15% moisture in hay) /(100-65% moisture in silage)= = $ per tonne for greenfeed / conversion to silage factor = $56.42/tonne value Using this valuation method produces a silage value matching what producers indicate their 2018 silage crop is worth^^^. ^^^However, it is yet to be determined if this method should take into consideration additional costs of chopping and hauling on top of this value (Swathing costs are both incurred in silaging and baling, and the cost of baling is likely similar to the costs of packing a pit). 23

24 6. Regional Forage Pricing Trends and Growing Conditions The variation in price listings by region in 2018 are noticeable. The price pattern follows the production trend (high prices in areas with low production). Regions in order from general highest asking price to lowest are: west central, south west, south east, east central, followed by the northern regions. A general observation is that there are very few listings in the north west. Producers in the area have stated there are not a lot of forages for sale, and sales are often neighbour-to-neighbour. Straw continues to be the most affordable in the east central region, while a late harvest has seen less straw listed for sale in the north east. Table 6 demonstrates the price variability according to region across Saskatchewan. Table Saskatchewan Forage Crop Prices by Region (simple average) $/Tonne Region of Saskatchewan Alfalfa* Grass Alfalfa/ Greenfeed Straw Grass South West & South Central - - $ $ $75.69 South East $ $ $ $ $64.94 East Central $ $ $ $ $55.34 Central & West Central $ $ $ $ $79.60 North West - $ $ $ $60.63 North Central & North East $ $80.51 $ $ $60.62 *includes both first and second-cut alfalfa A) South Central/South West Region When 2017 proved to be one of the driest on record, the follow up of a droughty, hot 2018 was not welcome. Perennial plants suffered the most with a cold and dry April/May followed by a hot, windy and dry period. The sporadic rains that saved many annual crops were too late for perennials. Yields were severely depressed at 0.7 tons/acre compared to tons/acre in Many forage stands were left to graze as there was not sufficient growth to hay. There were no second cuts, even on flood irrigation. Greenfeed yields in the south west and south central averaged 1.3 tons/acre. Producers are being advised to watch closely for nitrates in greenfeed due to the drought conditions. Feed quality across the regions is lower than normal because of drought stress. Alfalfa weevil was not seen in the region again this year. The cool spring limited grasshopper development and damage. There was no notable hay inventory at the end of feeding this spring. Pasture turnout was late as spring growth was slow. Forage users knew 2018 would be tough so greenfeed, silage, straw, and grains/pellets were sourced very early. With low yields, forage users in the south west were on average short 50% or more at the end of haying. Many producers are still looking for quality hay for after calving. The need for greenfeed on-farm has been satisfied for the most part in the region. Purchasing stateside could be an option if trucking was affordable- trucking hay from Carlyle, SK or Lewiston, MT to Cadillac, SK is the same distance. Some hay is coming from Alberta or northern or southeastern Saskatchewan depending on trucking costs. 24

25 Perennial hay is reportedly trading on average for $163.77/tonne. Greenfeed has traded at $155.51/ tonne, but some buyers are pulling back on greenfeed purchasing as they are now looking for higher quality perennials for after calving. Forages are selling quickly when they are placed for sale. Movement into Montana is non-existent in There continues to be interest in seeding forages, but seeding success rate has been mixed. There is a strong trend regionally, where more people are turning to grazing or haying annuals and mixed cover crops. Traditional forage users are seeking out annual cropland to rent for greenfeed production. Unproductive forage acres are being put into annual crop production. Although 2017 came as a surprise to southern producers, 2018 was not. Sourcing feed and alternatives early, culling much harder than normal, and selling heifer calves are practices being implemented onfarm. Both average and poor crops were baled across the region for feed in July and August. Pastures are in poor condition overall. Very little carryover is found even on well managed pastures. An adequate water supply of suitable quality still remains one of the major issues in the region. Producers will need to evaluate how they will get through 2019 in short order, within the coming months. Precipitation in September and October may replenish some topsoil moisture but it may not be enough to break spring plant dormancy in the south west without additional precipitation. B) South East Region The region started out with very poor soil moisture this spring and worry was high at May 29th. Many acres of greenfeed were seeded this spring. Other acres were seeded with the option of combining or baling. Timely rains in June were welcome in the south east. Hay yields were highly variable based on age of stand, fertility, and local rainfall. Younger, fertile stands had average yields, while older stands were below average. Yields ranged from 1.4 to 1.5 tons/acre- a half a ton an acre higher than in Almost no second cuts were taken in the south east region. Greenfeed yields were exceptionally good. Yields of 2.2 tons/acre were average. Alfalfa weevil was not a widespread concern but populations can locally still be a concern. Moisture dependant diseases (ergot and fusarium) is not be a major quality factor in 2018, but nitrates in greenfeed crops due to drought stress is a concern. Carryover on-farm was low coming out of winter Many cattle were turned onto pastures that were not yet growing. Producers indicated forage supplies were 'just right' to '10-20% short' going into September. Greenfeed made up the difference on-farm where perennial forage yields were short. September hay prices are averaging $139/tonne in the south east region, which is identical to Greenfeed averaged $ through September. Forages are priced to compete with canola, wheat and lentils for acres. Forages have been moving from east to west in September, but price and trucking cost might limit the overall movement. Demand from the northern counties in North Dakota still under drought is not likely 25

26 having an impact on prices in the south east. Yields in south west Manitoba were near average (similar to south east Saskatchewan), so demand pressure from Manitoba is likely not significant. What can be seen is that average yields and pre-planning have resulted in adequate on-farm supplies and stable forage prices in the south east. Pre-planning has included a roughage plan of seeded greenfeed, straw, pellets, corn, silage, and screenings. There are noticeable trends in the region. Land capable of annual crop production has been converted away from perennial forages and is not being put back into perennials. Mixed producers, and even straight livestock producers have turned to relying on annuals for winter forage. Silage usage is increasing year over year. Corn and greenfeed/yellowfeed acreage has also noticeably increased. Pasture conditions are mixed, with overgrazing very common. Aftermath grazing will be critical for stretching feed supplies, but feeding will likely begin quite early in the region. C) East Central Region Spring growing conditions were less than ideal in the east central region. Dry, cold weather persisted, followed by an intense heat which delayed spring growth. Precipitation was more plentiful than in 2017, but it was still a limiting factor for yield in most locations. East of Yorkton/Melville and north of Canora/Preeceville received more timely precipitation than the rest of the region. Regionally, yields were depressed anywhere from 1/2 on older stands without fertility programs to 1/3 on newer or fertilized stands. Yields for the region averaged 1.3 tons/acre in 2018, which is higher than 2017 ( tons/acre) when spring frost hurt production, but still only 1/2 of 2016's production ( tons/acre). Forage quality in the east central region will be average depending on local precipitation during haying. Nitrate levels in greenfeed should be tested, as hot and dry conditions can cause higher than acceptable levels. Precipitation in July and August did allow some producers who usually take a 2nd cut of alfalfa to do so. Alfalfa weevil distribution trends remain largely unknown. Pockets of infestations at the economic threshold for control do still occur in the east central region. Region wide infestations were not seen. Pastures were slow to initiate growth this spring. It was noted, that on June 9th, cows were still on feed in the western side of the region, which is longer than many livestock producers planned for. The long winter used up many on-farm reserves. Pre-planning for 2018 has resulted in most producers being 'just right' or ' 10-20% short' on feed. Livestock producers in the east central region did plan ahead and most 26

27 seeded planned greenfeed. Yields were mixed depending on fertility, timing of seeding, and precipitation. Yields across the region were estimated to be 1.6 tons/acre. There was a noticeable amount of pea straw baled this fall. Other producers have baled hailed crops, put up straw, and are looking to graze chaff piles. Acres going into forage production and coming out of forage production are estimated to be about the same across the region. Asking price for alfalfa/grass hay in the region ranges from $ /tonne with an average of $136.47/tonne. There is steady movement on good hay for $0.05/lbs. Many end-users will trade from neighbour-to-neighbour in the region. Earlier fall feeding and a later spring feeding period are expected again in Silage usage in the east central region continues to be strong. Producers who have a larger number of livestock, have access to large equipment, and where land is of high value continue to be the producers feeding silage. Pasture conditions were poor mid-september across the east central region. Pastures were listed as % short on topsoil moisture (September 10th 2018, Crop Report). While September rains improved topsoil, pasture conditions remain poor. Feeding will start early across the region this fall due to inadequate summer regrowth. Many riparian pastures are being reclaimed after years of excess moisture, but investment in fencing and allowing for rest while grass re-establishes are two factors working against the producer when they want to use these areas. Fall moisture will have a positive impact on pastures, but it will remain unknown until spring if turn-out will once again be delayed. D) North East Region Producers in the north east were forced to feed late into the spring as snow melt was slow. Spring growth was extremely slow. Harvest conditions were generally good. Localized rains did set a few producers back. Generally, quality will be average. Producers reported that yields on marginal soils with a lower moisture holding capacity were disproportionally poor. Producers felt that yields were average to below average for the region. Yields averaged tons/acre. Little forage from 2017 was carried over on-farm. Producers fed later into the spring than normal across the region. Most producers will have sufficient forage supply levels for the winter. On the western side of the region more greenfeed, straw, and grain will be used than normal. Areas east and north east of Tisdale have seen more of a surplus forage supply. Forages for sale have been selling quickly when put on the market. There will likely be very little on-farm carryover in the north east at pasture turn out in

28 Many of the forages listed for sale are from the western areas of the region. The asking price for alfalfa or alfalfa/grass hay falls in the $121/tonne range. These prices are near identical to 2017 prices. Forages tend to be moving locally or to the west central region. Planned greenfeed is expected to be used on-farm. Greenfeed was trading at an average of $102/tonne in September. Poor harvest conditions in September in the north east may result in some later crops being salvaged and baled to ensure on-farm supplies are sufficient or to capitalize on low forage stocks to the south. No significant change in forage acres has been noted in the north east. There are however, more producers adding silage to their feed rations. Many producers are looking at baled silage as an option for producing a quality product even if there is excessive moisture during haying. Pasture conditions appear to be good compared to many other locations in Saskatchewan. Producers will be looking to push the grazing season as late as possible to ensure on-farm forage supplies last until late spring. However, regrowth on tame pastures for fall grazing has been limited or less than normal in many locations. E) West Central /Central Region Moisture stress and cool conditions that persisted into May were ushered out by extreme heat and drying winds into June. There was a widespread lack of precipitation across the west central region in time for perennial forages to benefit. Haying occurred early and quickly. Many producers estimate yields were 20%-50% of normal in the region, with many perennial forage stands not being worth cutting yields are estimated to be tons/acre for alfalfa and mixed stands in the west central region. Greenfeed yields were below average, but less so, at 1.4 tons/acre due to timely rains at critical times. Dryland second cut alfalfa was non-existent. No notable insect or disease pressures were seen in the region this year. Producers were forced to feed late in the region; into June in some cases. A cold winter increased consumption and saw a high amount of bedding used. Little to no carry-over remained on-farm over the summer. Carry-over that usually helps to buffer shortfalls is just not part of the picture this fall. Alfalfa/grass hay is currently listed between $ /tonne across the west central region with a high percentage of listings trading hands. With very little forage available in the region, producers are purchasing and trucking feed out of the far north west and far north central areas into the west central region. Straw and greenfeed ($126/tonne average) are also in demand in the region. Prices are considerably higher than in Producers in the west central region are facing widespread supply shortages. Generally, producers were '50% or more short' of forages. Producers will be forced to make changes to their feeding and management strategies this year to feed livestock. Utilizing hailed crops, straw, greenfeed, wet/sprouted crops, silage, and purchased feed along with culling hard, not retaining heifers and herd reductions will be common. 28

29 No significant trends in forage acres are being seen in the west central region. Silage and annual crop use for forages continues to grow. More silage is now being seen grown in the irrigation districts as a primary crop. This trend is anticipated to continue into 2019 as on-farm reserves of perennial forages will be low. Many forage stands were not worth cutting this year and were grazed instead. Perennial pastures are in rough shape with many producers having to feed early already or producers having cattle sent home from pastures well over a month early. Conditions are poor. Pastures that have been pushed for a number of years are expected to have long term damage. F) North West /North Central Region Haying conditions and growth were variable in the north west region again in For most of the south and west central areas of the region, rainfall was non-existent or very spotty. Yields were poor here, but most hay was put up without rain so quality is sufficient. Elsewhere in the region, yields were average due to decent spring moisture. Unfortunately, extremely smoky conditions, frequent showers, and a low drying index impacted quality where yields were good (north of North Battleford). Haying conditions were made difficult into August with drying times tripling in many cases. Quality will be decreased because forages were weathered or were over-mature by the time they were cut. Yields averaged from tons/acre across the entire region. If yields were broken down further, the northern yield would be significantly higher and the south yield significantly lower than the regional average. Although some second cuts of alfalfa were planned, very few were likely taken. Greenfeed acres remain an important component of the annual forage supply. August greenfeed yields were estimated at 1.7 tons/acre, down from There was no indication of significant disease or pest infestations in 2018 in the north west region. Grasshopper forecasts had been high for the Meadow Lake area, but no significant damage to forage crops was reported. Levels of carry-over forages are usually low in the north west. Due to poor pasture growth in many areas, feeding lasted well into May and even into the beginning of June which used up most forages on hand. Producers will likely have an adequate winter feed supply across the region due to silage, greenfeed, straw, and purchased forages. Alfalfa/grass forage transactions were comparable to the 2017 average at $102/tonne. Forage continues to be transported from the northern areas of this region to the west central region and even the south west region. Silage acres continue to grow in the north west/ north central region. Conditions in the northern area of the region were moist and smoke covered during haying which lead some producers to silage additional acres including perennial forages. At the time of this report the north west had been hit with September rain and snow which put crops that could be salvaged in limbo and straw unavailable. It will take an extended warm and dry stretch for certainty to be brought to the area. Availability of straw may 29

30 become an issue with harvest delays. It is unknown if cereal crops will be sprouted and put into bales instead of combined. There was no notable change in forage acres in the north west region. Pasture conditions are highly variable across the region. Around Loon Lake producers fought against high moisture all growing season. Other pockets saw producers turning cattle into hayfields instead of grazing them. In the southern and eastern areas of the region pastures are dry and facing poor carryover. Elsewhere, in the north and west, growing conditions were favorable and pastures are in good shape. 7. Forage Price Trends in Neighbouring Jurisdictions Although early spring soil moisture levels in Alberta were mainly normal to moderately low (pockets of low/very low existed), Alberta faced the same spring weather as Saskatchewan. Soil was slow to warm and then forages became heat and moisture stressed. Precipitation was spotty and mixed forage yields were reflective. The Alberta Agriculture Crop Report (08/07/18) cited "Hot temperatures added to the stress on crops and forages in dry areas, causing heat stress and pushing maturity quickly, resulting in lower than normal yields". Average yields of 1.0 tons/acre were far below the five year average (of 1.5 tons/acre) across Alberta. Yields averaged 0.9 tons/acre in the southern region, 0.9 tons/acre in the central region and 1.0 tons/acre and 1.1 tons/acre in the north east and north west regions respectively (Alberta Agriculture, 2018). These are significant yield losses for the entire province. Silage yields province wide are estimated to be 3/4 of normal, but more silage was put up in Forage Specialists indicated that they are seeing lower energy and protein in perennial forage feed tests. They also indicate that $0.08/lbs forage and even $0.10/lbs forage is moving quickly and becoming scarce. Feed shortages are coupled with poor pasture conditions and early feeding. Indications are that producers have compensated by buying pricey hay, cutting grain crops for feed, silaging, selling livestock, and grazing stubble and straw. Forage Specialists predict more annuals for forage will be planned for spring 2019 and that poor hay stands may be broke. Manitoba experienced slow forage growth throughout May, mainly due to lack of moisture and cooler temperatures. Moisture continued to limit production up to haying. Alfalfa yielded poorly. Producers anticipated the lower perennial forage production and took measures to seed greenfeed crops. Alfalfa weevil caused damage in the Interlake region- as per producer's expectations there. As haying progressed, perennial forages yielded 40-60% of average across the province. Second cuts were limited. In the south west, overall yields were closer to average. Straw and greenfeed yields are looking to be a good average (Manitoba Agriculture Crop Reports, 2018). Precipitation during haying has resulted in mixed quality across Manitoba. The hot dry weather has resulted in higher nitrate levels in some forage crops. In the Interlake and Eastern regions, where hay shortfalls are abnormal, there was higher demand than normal. Province wide, pastures are in less than ideal shape. Montana forage crops suffered through devastating droughts in 2016 and Relief was seen in 2018 across nearly the entire state. The exception was in the northeast (right under Saskatchewan). 30

31 Producers there are still seeing dry conditions impacting forage production. Some winterkill had been seen on alfalfa, and a significant number of crested wheatgrass acres were impacted by winterkill in eastern Montana. Spring was generally cool and rainy. Forage yields in Montana were average to above average. Trade was initially slow post haying, but not because of buyer appetite. As on-farm reserves post winter were the 5th lowest ever recorded, individuals were replenishing personal reserves first. Demand from outside Montana is high, with the majority of feed being pulled to the south where drought is still categorized as extreme and exceptional in Colorado and Utah. Greenfeed yields were above average. Forage acres are decreasing in Montana. CRP land is due for renovation and other land is being moved into crop production. As in Saskatchewan, Montana producers are making a shift towards using annuals as forages. Much of the forage research in Montana is currently being conducted on annuals. Pasture conditions are good across the state. Decent fall moisture will allow for a longer grazing season. North Dakota continues to be in a moderate drought situation (see Figure 3). Hay production was highly variable. Some saw above average production where precipitation was timely. In other locations, such as areas one hour south of Saskatchewan, perennial production was half of normal. The cool, dry spring hurt grass and alfalfa production in these areas. Forage users were prepared in advance for low yields. Producers seeded more annual forages for grazing and silage. Although on-farm supplies were more than 50% short after alfalfa haying in these Counties (Wald, pers comm., 2018), forage movement remains slow in the northern regions of the state. Livestock producers on both sides of the border here planned early and secured annual forages which yielded well. Pastures are in poor shape after sustained drought, and will require substantial moisture to recover. Many North Dakota forage listings cite an abundant supply as a reason for selling. 31

32 LFDAP is a United States federal program developed under the 2014 Farm Bill. Producers are eligible for 60% of the monthly payment rate per head for 1-5 months depending on drought severity. The 2017 monthly rate was $30/adult beef cow or bull ($18/head payment). Producers in D2 drought areas can apply for a payment equal to one monthly payment ($18/head), whereas producers in D4 drought areas can apply for a payment equal to five monthly payments ($90/head). The payments are to offset feed costs and grazing loses, with the hopes of livestock being retained and land integrity maintained. In 2017 producers in D2, D3, D4 drought areas (see Figure 3) accessed the Livestock Forage Disaster Assistance Program-LFDAP (USDA, 2017) to the tune of $61.3 million dollars and $72.6 million dollars in North Dakota and Montana respectively. When producers access this program, it is influencing the purchasing power stateside. To-date in 2018, no claims have been made in Montana and only $ worth of claims have been made in North Dakota. The following table demonstrates price averages for various forage types across Western Canada and Montana and North Dakota. The table is based on data collected from a variety of online sources, including the respective government forage listing services, kijiji.ca, hayexchange.com, bizmanonline.com and others. Table Forage Prices in Adjacent Provinces and States (reported in CDN$/tonne) Forage Type Alfalfa 1st cut Alfalfa 2nd cut Alfalfa/ Grass Grass Straw Greenfeed Pulse straw Price Range $ $ $ $ $ $ Price Range $ $ $ $ $ $ $ Alberta Manitoba Montana** North Dakota** Avg Price ($/Tonne) $ $ $ $ $81.57 $ Avg Price ($/Tonne) $ $ $ $97.19 $62.44 $ Price Range $ $ $ $ $ $ Avg Price ($/Tonne) $ $ $ $ $76.17 $ $ _ Price Range $ $ $ $ $ $ $ Avg Price ($/Tonne) $ $ $ $ $65.69 $ $74.26 **American prices have been converted to CDN currency values average for week ending Sept 21, 2018 ($1USD = $ CDN) Alberta forages are priced much higher than 2017, as in-province demand is high. Excellent quality, high priced forages (10-12 cents/lbs) are still trading. Sales to Saskatchewan and British Columbia are strong where trucking is feasible. Generally, the asking price for alfalfa, alfalfa grass, and grass hay is $80.00 to $100/ tonne more in 2018 than in In some cases this would be double from Straw is averaging $30/tonne more in 2018 from the 2017 average of $49.40/tonne. There is a strong indication that roughage is in demand. At September 20th, greenfeed was double the asking price of 2017 ($93.67/tonne). However, the rain and snow since then may drastically change the trading price as crop is salvaged by baling. 32

33 As seen in Table 7, Manitoba hay prices are strong. The demand from within the province (Interlake & east) and from adjacent provinces is strong. High quality alfalfa is listed for $90/tonne more than in Forages geared towards cow/calf producers are $30-50/ tonne more than Greenfeed and straw asking prices have both nearly doubled. It is anticipated that prices may soften into the fall as early demand is met. Montana hay prices fell in 2018 thanks to relief from drought, which brought decent perennial production and good greenfeed yields. The price to stateside buyers is approximately $10-25/tonne (USD) lower than 2017 in all forage types. Straw remained the same in US funds. In Canadian funds the alfalfa classes (which are in demand in Saskatchewan) are near identical to 2017 even though the Canadian dollar is worth less than a year ago. Mixed forages are $20/tonne CND less, which increases the possibility of import into southern Saskatchewan. In North Dakota, alfalfa was priced slightly lower in 2018 ($5-10/tonne USD) than in Alfalfa/grass and grass forages used to feed beef cows saw a decrease of $20-36/tonne (both in USD & CND) due to decent supplies. In September 2017, 1.00 USD=1.216 CDN while the week ending September 21st, 2018 was 1.00 USD= CND. Although the USD strengthened against the CND, forages supplies are high and a lower USD asking price offset the eight cent difference in the dollar seen this year compared to last year. If the 2017 exchange rate was applied to this year's asking prices stateside, the 2018 asking prices for alfalfa, alfalfa/grass and grass would be approximately $20 CDN/tonne or more lower than in Straw would remain very similar in price. 8. Saskatchewan Pasture Rates Pasture rates continue to vary greatly depending on the arrangements made between the livestock owner and landowner, the location within the province, as well as whether the rental agreement is a long-term or short-term arrangement. Long-term rental agreements are most common on unsupervised pasture where renters must invest in infrastructure. Unsupervised pastures are those where the cattle are moved, checked, treated and supplied mineral by the cattle owner. Fence maintenance is usually left up to the cattle owner. In a supervised pasture, cattle management and fence repair falls on the landowner's shoulders. The current mean private pasture rate in Saskatchewan for yearling cattle is $0.77/head/day, with a range in rates from $0.75/head/day up to $0.80/head/day. Unsupervised and supervised pastures both fall within this rate range. This is a slight increase from last year. Those polled all indicated a rate increase was needed to cover costs and to reflect on-going profitability in the cattle industry. The current average unsupervised pasture rate for pairs is $1.06/pair/day across the province (range of $0.75/pair/day to 1.51/pair/day). The current mean rate is $1.00/pair/day. Producers indicate that rates that were not locked in did see a slight increase. The current average supervised pasture rate for pairs is $1.275/pair/day. The range is from $1.05/pair/day to $1.25/cow/day + $40/every live calf in the fall (+$0.33/day based on 120 days of grazing). Many custom grazers polled (province wide) increased fees in 2018 by a few cents per day. 33

34 Renting of aftermath grazing in the fall (i.e. crop residue, stubble grazing, sloughs is cropland) continues to be a practice that neighbours with working relationships carry out. The majority of these are longer term agreements that vary greatly depending on water availability, quality of fence, shelter and quality of residue available for cows. However, it should be noted many more of these arrangements were being made in 2018 to buffer feed shortages and increase cropland income. Aftermath grazing rates remain steady in the $0.25/head/day to $1/head/day range. The Saskatchewan Ministry of Agriculture administrates a Crown Lease program whereby producers rent grazing land, typically on a long-term basis. Lease rates are set annually using a market driven formula that takes into consideration the price of cattle the fall prior to the grazing season. For example, the 2018 Crown lease rates were based on the 2017 calf market. Rates are set using Animal Unit Months (AUMs) which is the amount of forage a 1000 lb cow, with or without a calf, can consume in one month. An excerpt from an article by the Saskatchewan Cattlemen's Association (February, 2017) provides the breakdown how the grazing lease rates are determined. Rent rate = price per pound x 46 pounds x 0.8 x 12.75% Price per pound = the preceding October/November weighted value of beef (i.e. calves, feeders & cull cows)*. 46 pounds = the amount of beef actually produced from one AUM. 0.8 = 80% conservation factor. A factor that allows the leaseholder to stock at 80% of the established carrying capacity of the land thus allowing for constant stocking of the land. This actually allows one year s free rent in five to account for drought years % = percentage share of production that the Crown takes for rent As seen below historic lease rates have changed drastically over the years, as have the fall calf prices it follows. Historical Saskatchewan Crown Grazing Lands Lease Rates ($/AUM): * * As the grazing rates are based on AUM s, each pasture is rated at an appropriate carrying capacity, which will vary according to ecoregion. For example, in the dry brown soil zone, native prairie grassland pasture carrying capacity, at the very best, will support 0.25 AUM/ac; the moist brown zone will support 0.35 AUM/ac; the dark brown soil zone is rated on average at 0.45 AUM/ac; and the black soil zone is rated at 0.55 AUM/ac. 34

35 Using the dry brown soil zone as an example, a 160ac pasture at 0.25 AUM/ac will support approximately 40 (1000 lb) cows for 1 month. Given that cows in Western Canada are larger, a rule of thumb is to assume one adult cow is equal to 1.4 AUMs. A 160 ac pasture stocked at 0.25 AUM/ac, could support 28 cows for one month, 14 cows for 2 months, or 7 cows for 4 months. Rated at 0.25 AUM/ac, that pasture will cost 40 x $8.97/AUM or $ to rent for the grazing season (this rate does not include taxes). Although this is a 20% increase from 2017, it is still below the highs seen in 2015 and 2016 because of the profitable calf prices in 2014 and The rate equates to approximately $0.41/hd/day. The leaseholder is also responsible for paying the land taxes and improvements over and above the lease fee. Taxes and improvement costs will vary according to each situation. The provincial government is in its final year of transitioning the formal Federal AESB pastures to patron corporations, and the first of the Saskatchewan Pasture Program (SPP) pastures are transitioning to patron owned corporations this winter. Lease rates for pasture corporations are the same as individual lease land. Pasture corporations charge land tax, maintenance (bush/weeds, water, fence), insurance, mineral, breeding, and supervision fees in addition to the lease rate. Pasture Corporation fees ranges are from $1.05-$1.75/pair/day. Most corporations have a buy-in fee as an assurance of spring delivery and fall payment. The SPP is being wound down over the next three winters. SPP rates are reviewed annually, and livestock producers have to apply to be patrons in the pasture, and meet a variety of criteria. The SPP looks after breeding and health management of the animals while they are at the pasture, which is typically for a 5 month grazing season. Rates for the 2018 season remained the same as 2017 at $0.66/cow/day, with a season price of $35/calf. SPP looks after breeding and health management of the animals, but patrons are charged additionally for veterinary treatments, mineral, and municipal taxes which can add a minimum of $18/cow/season to the overall cost. Bull usage is also additional. In 2018, there was movement of cow/calf pairs northward from the southwest as a drought proofing strategy. Many under stocked pasture corporations took on new patrons. Conservation organizations with land indicated an increase in inquires about potential for grazing. In the south and central regions custom grazers indicated that many cattle were sent home over a month early from pastures due to drought. Province wide, producers indicate that pastures are in over-grazed states. 35